Employees Are Exempt or Non-Exempt - Not Both
Since “exempt” employees are not covered by the overtime pay regulations, they do not have the possibility of collecting overtime wages to earn additional money. Many, however, would be happy to take on an extra job for their employer in exchange for more pay. With businesses reluctant to expand payrolls or fill vacant positions during this time of economic uncertainty, it would seem like a win-win situation: the company gets a job done by a proven employee who already knows the organization; the employee gets extra pay.
It is win-win…if it is handled correctly.
Often, the employee’s second job will be a non-exempt position, such as a technical, production, or lower-level administrative role which can be done part-time. When that happens, it would seem logical to pay the employee at the appropriate hourly rate for the additional work. The employee is considered “exempt” with regard to their original job, and “hourly non-exempt” for their additional position. However, that is exactly what a business should not do. Employees cannot be classified as partially exempt and partially non-exempt—they are one or the other.
A Department of Labor FLSA opinion letter provides guidance and discusses the inverse situation. In that case, a non-exempt employee assumed exempt responsibilities in addition to her regular job. The DOL said that the employee’s responsibilities should not be looked at as two different jobs—instead, the “character of the employee’s job as a whole” needed to be analyzed to see whether the entire position is exempt or non-exempt. The key is whether the employee’s “primary duty” consists of exempt work. If it does, the employee is exempt from the overtime pay requirements; if not, the employee is non-exempt and must be paid overtime wages. (And note: overtime pay would not be just on the time spent performing the additional duties, but on any hours worked over 40 in a work week.)
What should an employer do when an employee works two differently classified “jobs”? First, consider that all employees for your company have only one job—although the job may consist of diverse tasks. If an exempt employee wants to take on non-exempt functions, rather than cast it as two separate jobs, rewrite the employee’s exempt job description to encompass all of their duties. Take care to not allow the non-exempt portion to require 50% or more of their time, as this factor could render the entire position non-exempt. Then, figure out what the company should pay this employee for the totality of his or her work and increase the position’s salary accordingly. That way, the employee can be compensated for his or her additional work without compromising an exempt status, and the company avoids yet another overtime pitfall.
